The First Bancshares, Inc. Announces the Acquisition of Iberville
Bank and Gulf Coast Community Bank, and a Private Placement of Preferred
Stock

October 14, 2016 09:00 AM Eastern Daylight Time

HATTIESBURG, Miss.--(BUSINESS WIRE)--The First Bancshares, Inc. (NASDAQ: FBMS) (“First Bancshares” or “the
Company”), holding company for The First, A National Banking
Association, (“The First”) announced today the signing of a Stock
Purchase Agreement with A. Wilbert’s Sons Lumber and Shingle Company
(“A. Wilbert’s Sons”), parent company of Iberville Bank, Plaquemine,
Louisiana, under which First Bancshares has agreed to acquire 100% of
the common stock of Iberville Bank in an all-cash transaction. The
Company also announced today the signing of an Agreement and Plan of
Merger under which it has agreed to acquire Gulf Coast Community Bank
(“GCCB”), Pensacola, Florida, in an all-stock transaction. In addition,
the Company entered into Securities Purchase Agreements (“SPAs”) with a
limited number of institutional and other accredited investors,
including certain directors of the Company (collectively the
“Purchasers”) to sell a total of 3,563,380 shares of mandatorily
convertible non-cumulative, non-voting, perpetual Preferred Stock,
Series E, $1.00 par value (the “Series E Preferred Stock”) at a price of
$17.75 per share, for aggregate gross proceeds of $63.25 million.

Iberville Bank Transaction

Under the terms of the Stock Purchase Agreement, First Bancshares will
pay A. Wilbert’s Sons a total of $31.1 million in cash. Approximately 8%
of the purchase price payable to A. Wilbert’s Sons is being held in
escrow as contingency for flood-related loan losses in the event losses
occur due to recent flooding in Iberville Bank’s market area.

At June 30, 2016, Iberville Bank had approximately $258.5 million in
assets, $140.8 million in net loans, $230.6 million in deposits and
$26.2 million in stockholder’s equity. Iberville Bank serves the Baton
Rouge, LA area through 10 locations operating in Addis, Baton Rouge,
Denham Springs, Pierre Part, Plaquemine, Plattenville, Port Allen,
Prairieville, Saint Gabriel and White Castle, Louisiana. The transaction
will significantly increase the combined banks market share in the Baton
Rouge area. Additional information is available on the Iberville Bank’s
website: www.ibervillebank.com.

The Stock Purchase Agreement has been approved by the Board of Directors
of First Bancshares and A. Wilbert’s Sons. Closing of the transaction,
which is expected to occur late in the fourth quarter of 2016 or early
in the first quarter of 2017, is subject to customary conditions,
including regulatory approval and approval by the shareholders of A.
Wilbert’s Sons.

First Bancshares currently estimates annual pre-tax expense reductions
associated with the transaction will be approximately 40% of Iberville
Bank’s annual non-interest expenses. Assuming the transaction is
completed in the first quarter of 2017, the expense savings are
estimated to be fully achieved by the end of 2017. The transaction is
expected to be accretive in 2018, the first full year of combined
operations. Estimated acquisition and conversion related costs are
approximately $6.6 million on a pre-tax basis.

The transaction is expected to have an earnback period of approximately
4 years from the completion of the transaction. The internal rate of
return for the transaction is projected to be greater than 25% which is
well above First Bancshares’ estimated cost of capital.

Klein W. Kirby, President of A. Wilbert’s Sons, commented, “Iberville
Bank has been a part of A. Wilbert’s Sons since 1931. We are proud of
our 85 year bank history and are very pleased that Iberville Bank will
continue to be operated as a community bank under the leadership of The
First. Iberville Bank’s customers should see a seamless transaction and
the same local leadership after the transaction is closed. The First is
an outstanding banking organization and we look forward to an even
better Iberville Bank going forward.”

Advisors

Keefe, Bruyette & Woods, Inc., with Christopher T. Mihok as lead
investment banker, acted as financial advisor to First Bancshares, and
Jones Walker LLP, with lead attorney Neal Wise, acted as its legal
advisor. Sheshunoff & Co., with Curtis Carpenter as lead investment
banker, acted as financial advisor to A. Wilbert’s Sons Lumber and
Shingle Company, and Goodwin Procter, LLP, with lead attorney Andrew
Goodman, acted as its legal advisor.

Gulf Coast Community Bank Transaction

Under the terms of the Agreement and Plan of Merger, GCCB will merge
with and into The First. First Bancshares will issue GCCB’s shareholders
shares of the First Bancshares’ common stock which, for purposes of the
acquisition, will be valued through a 30-day average of First
Bancshares’ Common Stock price as of five (5) business days prior to
closing. The merger consideration is valued at $0.50 per share of GCCB
common stock for a total of approximately $2.3 million.

As of June 30, 2016, GCCB had $133.4 million in total assets, $82.8
million in net loans, $115.7 million in deposits and $5.8 million in
stockholders’ equity. GCCB serves the Pensacola, Florida metropolitan
statistical area through five locations in Gulf Breeze, Pace and
Pensacola, Florida. Information is available on GCCB’s website: www.mygulfbank.com.

The merger agreement has been approved by the Board of Directors of each
company. Closing of the transaction, which is expected to occur late in
the fourth quarter of 2016 or early in the first quarter of 2017, is
subject to customary conditions, including regulatory approval and
approval by the shareholders of GCCB.

First Bancshares currently estimates annual pre-tax expense reductions
associated with the transaction will be approximately 46% of GCCB’s
annual non-interest expenses. Assuming the transaction is completed in
the first quarter of 2017, the expense savings are estimated to be fully
achieved by the end of 2017. The transaction is expected to be accretive
in 2018, the first full year of combined operations. Estimated
acquisition and conversion related costs are approximately $3.3 million
on a pre-tax basis.

The transaction is expected to have an earnback period of less than 3
years from the completion of the transaction. The internal rate of
return for the transaction is projected to be greater than 25% which is
well above First Bancshares’ estimated cost of capital.

Buzz Ritchie, President and Chief Executive Officer of GCCB, stated, "We
are pleased to have the opportunity to join The First. We are convinced
that they are fully committed to the values of community banking with an
emphasis placed upon long term relationships. This is a strategic move
for us as we will strengthen and expand our core products and services
and will better serve existing and future customers. We believe this
merger also provides strong value for our shareholders who have been
committed and loyal to us over the years."

Advisors

Performance Trust Capital Partners, with Jonathan W. Briggs as lead
investment banker, acted as financial advisor to First Bancshares, and
Jones Walker LLP, with lead attorney Neal Wise, acted as its legal
advisor. Monroe Financial Partners, Inc., with Paula S. Johannsen as
lead investment banker, acted as financial advisor to Gulf Coast
Community Bank, and Smith MacKinnon, PA, with lead attorney John P.
Greeley, acted as its legal advisor.

Combined Company

Upon completion of all transactions, the combined Company will have
approximately $1.6 billion in total assets, $1.4 billion in total
deposits and $1.1 billion in total loans. The Company will have 48
locations in Mississippi, Louisiana, Alabama, and Florida.

Private Placement of Preferred Stock

First Bancshares also announced today the signing of SPAs for a private
placement of Preferred Stock, Series E, $1.00 par value. The Company
expects to raise gross proceeds of $63.25 million in new capital through
the private placement of 3,563,380 shares of its Series E Preferred
Stock at a price of $17.75 per share.

The preferred stock will automatically convert into shares of First
Bancshares’ Common Stock at a ratio of one share of Common Stock for
each share of Preferred Stock owned within three business days following
the Company’s receipt of shareholder approval. It is currently
anticipated that the shareholders’ meeting at which this approval is to
be solicited will be scheduled for December 7, 2016.

The Company intends to use the net proceeds from this offering to
finance a portion of the Iberville Bank Acquisition and related
expenses, to support its capital ratios in connection with Iberville
Bank and GCCB acquisitions and for general corporate purposes. If the
Iberville Bank or GCCB acquisitions are not completed, the shares of
Series E Preferred Stock will remain outstanding and proceeds will be
used for general corporate purposes to support growth strategy, which
may include organic growth, funding acquisition opportunities, de
novo branching into new markets, redemption of our CDCI securities
or other organic expansion of our business.

The Company engaged the investment banking firm of FIG Partners, LLC to
act as its Senior Placement Agent, Stephens Inc. to act as its Junior
Placement Agent, and Keefe Bruyette & Woods, Inc. as its Co-Placement
Agent, all to assist with the offering. The law firm of Jones Walker LLP
acted as legal counsel to First Bancshares and King, Holmes, Paterno &
Soriano, LLP served as counsel to the Placement Agents.

M. Ray “Hoppy” Cole, President & Chief Executive Officer of First
Bancshares and The First, commented, “We believe that the announcements
today of two mergers and the capital raise are transformational in the
history of our company and create tremendous value for our shareholders.
We are thrilled to join forces with Iberville Bank and Gulf Coast
Community Bank. Both institutions share a common set of core values with
our company. They have distinguished themselves in their respective
markets by being totally focused on serving their clients and
communities, by delivering exemplary service and being good corporate
citizens. Their respective cultures align perfectly with ours which
focuses on safe, sound, profitable growth.

The combination of these institutions is a continuation of our strategic
plan of creating a regional community bank in the Gulf South. The
resulting company will offer additional products, services, locations
and capacity which will allow us to better serve our existing clients
and provide opportunities for growth in two very attractive markets,
Pensacola, FL and Baton Rouge, LA. We are excited and honored that these
institutions have agreed to partner with us to form a company that we
believe will provide exceptional returns to our shareholders.”

About The First Bancshares, Inc.

The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi,
is the parent company of The First, A National Banking Association.
Founded in 1996, the First has operations in Mississippi, Louisiana and
Alabama. The Company’s stock is traded on NASDAQ Global Market under the
symbol FBMS. Information is available on the Company’s website: www.thefirstbank.com.

Forward Looking Statement

This news release contains statements regarding the projected
performance of The First Bancshares, Inc. and its subsidiary. These
statements constitute forward-looking information within the meaning of
the Private Securities Litigation Reform Act. Actual results may differ
materially from the projections provided in this release since such
projections involve significant known and unknown risks and
uncertainties. Factors that might cause such differences include, but
are not limited to: competitive pressures among financial institutions
increasing significantly; economic conditions, either nationally or
locally, in areas in which the Company conducts operations being less
favorable than expected; and legislation or regulatory changes which
adversely affect the ability of the combined Company to conduct business
combinations or new operations. The Company disclaims any obligation to
update such factors or to publicly announce the results of any revisions
to any of the forward-looking statements included herein to reflect
future events or developments. Further information on The First
Bancshares, Inc. is available in its filings with the Securities and
Exchange Commission, available at the SEC’s website, http://www.sec.gov.